AustralianSuper: A Glencore listing at ASX could be positive

AustralianSuper, a pension fund, said on Wednesday that if Glencore decided to list its shares on the Australian Securities Exchange it would be a "positive" move for the bourse as well as the Swiss-based commodities trader.

Luke Smith, portfolio manager at AustralianSuper, said that listing Glencore on the Australian Stock Exchange would be a positive move for both Glencore and the Australian stock market.

Smith said that the move would be beneficial to Glencore, as "we believe that the Australian mining share market is one of the most well-informed and best markets in the world," which would give its shares a greater chance to reflect their company's value. He said the fund had discussed the issue with Glencore, and that a listing on ASX would give investors more options.

Glencore said that it was open to the idea of a secondary listing.

Rio Tinto and Glencore?explored earlier this year the possibility of a merger, which would have created a $240 Billion company. Rio Tinto walked away saying that it did not see enough cost benefits. Glencore may still be interested in a merger.

Some mining CEOs, like Glencore CEO Gary Nagle, have said that the industry must grow to be more influential and relevant - as well as to attract interest from an even wider audience.

Smith said AustralianSuper is cautious about mining companies becoming bigger, because "even if a large firm emerged," it would still be nowhere near the major technology companies.

He said: "We approach M&A cautiously and will be open-minded if it creates value."

BlackRock portfolio manager Olivia Markham said earlier that she thought "sensible M&A" was a good way for miner to grow, and to attract generalist investors who would fund large and complex projects.

Smith said that Australian Super had a history of saying yes or no to transactions. It's important not to focus on the transaction itself and the?immediate gratification? of perhaps a 20% or 30% increase in share prices.

We're always thinking about three to five-years. What will the company be worth in three or five years? Is this price paid today appropriate? Helen Clark, Perth (reporter); Christian Schmollinger & Thomas Derpinghaus (editors)

(source: Reuters)